RBI has asked the National Payments Corporation of India (NPCI) to consider using UPI for Paytm App operations and migrate @paytm handles to 4-5 banks. Paytm Payments Bank was earlier barred from collecting credits after March 15, 2024.
On Friday, the RBI has requested the National Payments Corporation of India (NPCI) to explore using UPI to allow Paytm App to continue operations and migrate @paytm handles to 4-5 banks.
RBI requested NPCI to consider becoming a third-party application provider for Paytm’s UPI operations.
The central bank banned Paytm Payments Bank from taking client account and wallet credits after March 15, 2024.
RBI has asked the National Payments Corporation of India (NPCI) to review the request to become a Third-Party Application Provider (TPAP) for UPI channel for continued UPI operation of the Paytm app to ensure seamless digital payments by UPI customers using the ‘@paytm’ handle operated by the Paytm Payments Bank.
RBI said One97 Communication Ltd. (OCL), which controls Paytm, requested it.
The Reserve Bank of India (RBI) said NPCI may certify 4-5 banks as Payment Service Provider (PSP) banks with high-volume UPI transaction capabilities for easy movement of ‘@paytm’ handle to other banks.
RBI took further supervisory action against Paytm following a Comprehensive System Audit report and external auditor compliance validation report indicated chronic non-compliances and serious supervisory concerns in the bank.
The order requires One97 Communications Ltd. and Paytm Payments Services Ltd. to deactivate their Nodal Accounts immediately.
The decree specifies that any pipeline and nodal account transactions began on or before February 29, 2024 must be settled by March 15, 2024, and no additional transactions will be allowed.
Conclusion
The RBI has asked the NPCI to investigate using UPI to allow the Paytm App to continue operations and migrate @paytm handles to 4-5 banks. The RBI has stopped Paytm Payments Bank from receiving customer account and wallet credits after March 15, 2024. The RBI has also asked NPCI to consider becoming a third-party application provider for Paytm’s UPI operations.
